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No. 136. The Secretaby, General Post Office, Wellington, to the Deputy Postmastee-Genebal, Sydney. Sib,— General Post Office, Wellington, 12th February, 1898. I have ' the honour to enclose herewith copy of a letter from Mr. Huddart [see Enclosure 1 in No. 124] to the Colonial Office, received through the Agent-General for this colony, relative to the proposal of the London Post Office to pay over to Canada the Postal Unior sea-rates for the conveyance of New Zealand correspondence from Vancouver. As you are aware, the resolutions passed in the House of Representatives of this colony on the 13th December last in connection with the Vancouver service provided that all payments or contributions from other countries were to be receivable by the contractors, and from a cablegram received from the Agent-General for New Zealand on the 10th idem it was presumed that the sea-rates for the conveyance of the London mails between New Zealand and Vancouver'would be so paid. From later advices, however, it would appear that it was the intention of the Imperial Post Office to pay the rates to Canada. The Agent-General was therefore requested to press for the arranging of the payment to the contractors, but up to the present the desired consent has not been obtained. He has again cabled that the London Office states that the question is one for arrangement between New Zealand and Canada, but that office has offered to address the Canadian Government on the subject. This offer has been accepted. I should, however, be glad if you could also see your way to move in the matter, and request the Agent-General for your colony to cooperate with the Hon. Mr. Reeves for the purpose of making joint representations to the London Post Office, so that a satisfactory settlement may be come to as soon as possible. Of course, should Canada in the meantime agree to the desired arrangement further action will not be necessary. I have, &c, The Deputy Postmaster-General, Sydney. W. Geay, Secretary.

No. 137. The Agent-Geneeal to the Hon. the Pbemiee. (Telegram.) London, 14th February, 1898. Vancouver service : In reply to your telegram 11th, I am strongly of opinion inexpedient Imperial Post Office address Canada with regard to sea-rates. I think Imperial Post Office views unfavourable to New Zealand Government's claim. Would again urge you to approach Canada direct.

No. 138. The Secretary, General Post Office, London, to the Hon. the Postmaster-General, Wellington. Sm,— General Post Office, London, 17th February, 1898. I am directed by the Postmaster-General to acknowledge the receipt of your letter of the Bth of last month [see No. 70] on the subject of the arrangements for the mail packet services between Auckland and San Francisco, and between Wellington and Vancouver, and enclosing a,, pro forma time-table of these services for the present year. At the request of the Agent-General, instructions had already been given for all correspondence for New Zealand to be sent alternately vid San Francisco and via Vancouver, unless specially superscribed to be forwarded by some other route. Pending the establishment of the proposed fast Canadian packet service, the mails are being forwarded by way of New York. I am, &c, The Postmaster-General, Wellington. H. Buxton Forman.

No. 139. The Agent-General to the Hon. the Peemiee. Westminster Chambers, 13, Victoria Street, London, S.W., 25th February, 1898. Sib, — Pacific Mail-service. I beg to acknowledge the receipt of- your letter of the Bth January last [see No. 69], enclosing draft copy of the Vancouver mail-service contract, and also copies of the pro forma timetables. Since my letter to you of the 10th instant I received your telegram of the 11th instant, stating you would prefer that the Imperial Post Office should address Canada as regards the payment of the sea-rates. At an interview I had with the Assistant Secretary at the London Post Office this matter was fully discussed, with the result that I felt convinced that the Imperial Post Office were not at all inclined to alter their views, inasmuch as in previous similar cases precedents had been established which, if followed as regards the Vancouver service, would place, at all events, a considerable portion of the sea-rates at the disposal of Canada. All the special particulars connected with the establishment of the Vancouver service are necessarily better known to New Zealand than to the Imperial authorities, and I cannot therefore help thinking that the interests of the colony and also of the contractors would be better served if you were either to communicate direct with Canada on the subject or instruct me to do so on your behalf. I therefore sent you a cablegram on the 14th instant expressing my opinion that it would not be expedient to ask the Imperial Post Office to address Canada, and repeating the